M&S pays Burns £450,000 to go

Marks & Spencer is risking further anger among its shareholders by awarding its outgoing chairman, Lord Burns, a payoff of £450,000.

Burns, who will have served just two years on the M&S board, is stepping down to make way for the chief executive, Sir Stuart Rose, to be elevated to executive chairman - a role that contravenes corporate governance guidelines and has irked many shareholders.

An M&S spokeswoman said yesterday that Burns was entitled to a year's pay as compensation because "he is stepping down in the interests of the business" rather than retiring or leaving to do something else.

The former Treasury mandarin has a one-year contract and the remuneration committee of the store chain is expected to meet soon to rubber-stamp the payment. The spokeswoman said Burns was not expected to waive his contractual right to the payment.

The reshuffle is necessary, the company said, to allow Rose to identify a competent successor when he steps down. He has extended a promise to stay at the helm of the retail chain until next summer into a pledge to remain in place until 2011.

M&S insists that at least a third of investors support the boardroom reshuffle. However, it has not been able to persuade any to speak in support of Rose's new role. Legal & General, one of the biggest shareholders in M&S, has condemned the reshuffle as "unwelcome".